Nelson College London: HND Business Law Report on Legal System

This report provides a comprehensive overview of business law, focusing on the English legal system. It begins by exploring the various sources of law, including case law and legislation, and details the law-making process within the Parliament, highlighting the roles of government and the application of statutory and common law in courts. The report then examines the potential impact of different laws, such as employment, contract, and companies law, on businesses. It further delves into the legal formation of different business organizations, including sole proprietorships, partnerships, and companies, and discusses their management and funding. Finally, the report recommends various dispute resolution methods for resolving business conflicts. The report is well-researched and provides a thorough understanding of the subject matter, covering the key aspects of business law and its practical implications.

Business Law

Contents
INTRODUCTION.......................................................................................................................................3
TASK 1.......................................................................................................................................................3
P1 Various sources of the laws................................................................................................................3
P2 Process of law making together with role of government and application of statutory and common
law in courts............................................................................................................................................4
TASK 2.......................................................................................................................................................5
P3 Potential impact of different laws on businesses................................................................................5
TASK 3.......................................................................................................................................................7
P4 How business organizations are legally formed..................................................................................7
P5 How business enterprises are managed and funded............................................................................8
TASK 4.......................................................................................................................................................9
P6 Recommend different dispute resolution for resolving disputes.........................................................9
CONCLUSION.........................................................................................................................................10
REFERENCES..........................................................................................................................................11

INTRODUCTION
The law is the combination of regulations and rules that mainly regulates citizen’s
behavior. Likewise, the business law is mainly enacted so that the functioning and working of
enterprises may be regulated in order to ensure smooth running. It is the broad field which
consist of many legislations such as contract, data protection, health and safety legislations,
employment law, companies act and many more. Every enterprise consist of various employees
that are considered as their valuable asset as they are behind the success and growth of
organization so it is important to subject them from to some rights so that they are protected from
exploitation (Zharylkapova and et. al., 2017). This report shall cover the English legal system,
business laws and its impact on it and different business organizations. Further it will add
management and access of funding for businesses and various alternate dispute resolutions.
TASK 1
P1 Various sources of the laws.
The English law can be referred to as those rules and regulations which are followed in
the civil and criminal disputes. The English legal system is generally administered by the justice
courts who apply the statutory and common law in order to resolve the dispute. There are various
sources of legislations that are discussed below-
Primary
These are regarded as the original law source and authoritative in nature as they are enacted
by the authority that has power to make the laws. Various primary sources are discussed below-
 Case laws- It is the primary and fundamental source of law which consists of the
judgments and decisions given by judges in cases. It is published in law reports and
comprises of facts, issues, legal principles, reason and decision. These cases and its
decisions are binding for future judgments and the subordinate courts are bound to follow
the judgment of Superior Court. It is also regarded as the common law.
 Legislation- It includes those laws which are made by authoritative and supreme
authority of law that is called Parliament. There is no written constitution in UK so the

principles of the Constitution are written in the laws which are made by parliament
(Sihabudin, 2019).
Secondary
These are regarded as best way to begin the research on the law as it comprises of various
law commentaries. Some of them are narrated below-
 Legal encyclopaedia- This comprises of the cases, issues and key points and is regarded
as the best way to start the law research.
 Law journals- It mainly covers the specific and general areas of law and comprises of the
case commentaries and articles so that legal issues are understood with clarity and in a
detailed manner.
 Textbook- These are written by the academicians so that the students can research on
different legal topics and also bring clarity in their law concept.
 Parliamentary non parliamentary publications- The former includes the debates,
command papers and other documents while the latter deals with reports brought from
different government agencies and departments (Addink, 2019).
P2 Process of law making together with role of government and application of statutory and
common law in courts.
The Parliament is the supreme authority who has the power to make the legislations. It is
such place where in each member meet so that the law making process can be began. For
enacting a law, a bill is proposed in the Parliament which is a new idea or the draft that
undergoes various steps through discussions and debates. The process of making of law is
narrated thereunder-
 First reading- This stage involves arrival of the bill and only the name is read in either
house.
 Second reading- It is a stage which includes discussions and the debates on the purpose
and key areas of the bill. There is no voting at this stage.

 Committee stage- This step involves the detailed analysis by examining the bill line by
line and thereafter amendments are suggested. Votes are generally taken so that the
amendments can be implemented.
 Report stage- It involves another chance to bring amendment in bill and the proposed
changes are included by taking votes from the members of Parliament.
 Third reading- It is the final step wherein the members of Parliament are given a chance
to bring any changes in bill with a purpose to close the loopholes in it
 Consider amendments- This step is also called as ping pong in which the changes that
are suggested by one of the house is send to the other house for its acceptance or the
rejection. Generally when any changes are being sent by Lords, it might be accepted or
rejected by Commons and vice versa.
 Royal assent- Whenever a bill is passed by Parliament it needs the royal assent from the
Queen so that the enforceability of it is ensured and the bill can be converted into law
(Smits, 2017).
Application of law in courts
The common law is made by the superior courts and every subordinate court is legally
bound to follow it. In the English legal system, both the statutory and common law has similar
relevance where the judges use their knowledge, skill and expertise in order to bring a decision
in case. The statutory laws are interpreted by the judges in cases while legal principles and
doctrines are derived which are known as the common law. Likewise, both these laws are
applied by the justice courts in UK so that the efficient judgment is brought and clarity is given
to the legislations already enacted.
TASK 2
P3 Potential impact of different laws on businesses.
The business law is generally made with the sole purpose of governing the business
organizations and if it is not complied by the enterprises, they are subject to legal restrictions,
penalties and actions. The potential impact of different business legislations on the organizations
are illustrated thereunder-

 Employment law- This legislation is enacted with the sole aim to protect the rights of
employees and subject them to different rights like equal pay, prevention of
discrimination, protection from unfair or the wrongful dismissal, equal holidays and
many more. There are many legislations that come under the scope of employment law as
it is a vast field which protects the workers from exploitation. For example, the National
Minimum Wages Act is enacted to provide minimum wages to the employees
irrespective of any protected characteristics like gender, age, etc. Moreover, the Equality
law is aim to bring fairness and equality in business so that equal opportunity is given to
every employee and discrimination is prevented. The businesses are legally bound to
frame their organizational policy in such a manner that these laws are complied with it.
 Contract law- It mainly regulates the terms of agreement. Nowadays, every business
involves in different transactions so the contract law protects the parties from any loss or
damaged due to the breach of agreement or any term which is specified in the contract. It
regulates the obligations, rights and liabilities of parties so that there is legal enforcement
of the obligations. The law provides various remedies to the aggrieved party so that they
do not face any loss or damage due to breach of contract and can be placed in similar
positions when the contract was fulfilled (Bayefsky, 2017).
 Companies law- It comprises of different rules that regulates the incorporation and
winding up of companies. The aim of this legislation is to bring transparency in the
working of companies so that the stakeholders that are associated with it are given
protection from any hardship or exploitation. This law provides the rights and liabilities
of different stakeholders so that the companies are run in an effective manner. The
directors of companies are subject to different duties to which they are legally bound to
follow. Various amendments are brought on timely basis with the changing needs of
society so that a transparency is maintained for investors and shareholders who have
invested their money in the companies.

TASK 3
P4 How business organizations are legally formed.
There are many business organizations that are generally formed in order to carry on the
functions of it. They have their own structure of business and consist of legal configuration that
defines the liabilities and rights of owner and different stakeholders that is associated with the
organization. Each enterprise has different financial structure, ownership, liability, control and
span of life and these vary from different types of business organizations. There are different
types of business organizations that are legally formed in UK. These are illustrated below-
 Sole proprietorship - Such kind of businesses are suitable generally for the small scale
businesses as it involves one single owner which has the sole control and management of
the business. The owner is subject to work independently and freely without the
interference of 3rd person but there is personal unlimited liability of the sole proprietor
for any liability or debt of the firm. In order to form the sole proprietorship, the owner is
required to make the registration at HMRC with the name of enterprise. There is no
further complex process to form the sole proprietorship.
 Partnership- This type of business organization involves two or more people as owners
who mutually decides to form the partnership. As there are two or more owners who are
called the partners, so there is sharing of profits, capital contribution, decision making
power, loss responsibilities and control in the firm. Commonly, the ratio of profit and loss
is decided by the contribution of capital made by each partner and it may be fixed either
through the agreement or in a verbal manner. In UK there are two types of partnership
where in the first is general in which the partners have unlimited liabilities and its legal
formation involves the registration at the HMRC together with the partnership agreement
while the second is known as limited liability partnership where in the partners have
limited liability and in order to form LLP, a registration is required at HMRC and
Companies House (Anisina and Pavlova, 2021).
 Companies- It is known as the separate legal entity which is different from its owners. It
is the artificial personality which has its common seal where it can sue and be sued by
any other person or enterprise. The directors have the sole control of running the
company and limited liability is present of the owners and they are not subject to personal

liabilities. This type of business organisations is liable to pay corporation tax because
each profit commonly belongs to company and not directors. The legal formation of it
involves lengthy and complex procedure as there are different formalities to be fulfilled
at Companies House (Cameron, 2018).
P5 How business enterprises are managed and funded.
As there are different types of business organizations and they vary on the basis of their
structure and other aspects, so there are different ways for management of these business
enterprises. They are also subject to raising their finances in a distinct manner. The funding and
management of various business organizations are illustrated thereunder-
 Sole proprietorship- These are generally managed by the sole owner of the firm that has
the responsibility, power and liabilities of business. The owner of sole proprietorship
manages the daily operations of the firm and is subject to the decision making power as it
has the control and management of the firm. As this type of business organization is
suitable for small scale business, there is fewer funds required to manage its working and
it may be acquired through the bank loans or by personal savings of proprietor.
 Partnership- This type of business organization comprises of two or more people as the
owner so it is managed by the partners on a mutual basis which they have agreed either
on the contract or verbally. The decision making power and the power to manage the
working of partnership firm rest in the hands of partners on the basis of their contribution
in capital or the profit or loss ratio. This type of organization can raise the funds by bank
loans or the partners can use their personal savings in order to contribute in making the
capital of the firm.
 Companies- This business organization operates at large scale. There are two types of
companies where in the first is public company that has power to raise the finances by
inviting the public to subscribe the shares of the firm so that its share capital is raised and
the second is private company which raises its funds by equity or debt. The private
companies are managed by the directors who are called the owners of the company while
the public company is generally managed by board of directors who are elected by
shareholders in order to represent their interest while taking any decision (Leyland,
2021).

TASK 4
P6 Recommend different dispute resolution for resolving disputes.
For a business enterprise, there are many legal solutions available so that their disputes
are resolved in an appropriate manner. Litigation is the common and foremost method by which
the dispute can be resolved but it is a costly and time consuming process. In order to prevent this
method, there are various dispute resolutions which are enacted by the Parliament of UK under
the Civil Procedure Rules, 1986. These resolutions are aimed to bring speedy disposal of
disputes and are regarded as cost effective method. Various legal solutions in order to solve the
disputes are discussed thereunder-
 Arbitration- Under this method, an independent and neutral arbitrator is appointed by the
parties who try to resolve the dispute between them. The parties are free to choose their
arbitrator and they must be in odd number so that a majority decision is brought.
Arbitrator provides its decision after hearing the facts and evidence and it is called as
award which is binding on the parties.
 Negotiation- This dispute resolution involves appointing the independent 3rd party which
negotiates between parties with an aim to bring the amicable solution between them so
that there is win-win situation for both and no loss is suffered by any of the party. In
order to bring binding effect to the decision of negotiator, the agreement must be signed
by the parties (Powell, Stratton and (Whiting, 2017).
 Mediation- It involves appointing the independent 3rd party with the sole aim to mediate
and provide suggestions to the parties. The decision or suggestion of mediator is not
binding on the parties rather it is just an advice which can help in resolving the dispute.
 Conciliation- This solution involves appointing the conciliator who after hearing the
facts and evidence passes a decision which is called as settlement. The decision can be
binding on parties when they sign the settlement agreement but this resolution is flexible
in nature as the parties are free to inculcate their decision in the agreement (Richman,
2017).
For the case scenario, the parties can opt arbitration to resolve their dispute as it is the
international dispute between the parties that relates to import. This method of dispute resolution

can help in bringing the binding decisions in a speedy manner so that the dispute can be resolved
timely and in cost effective manner.
CONCLUSION
It is concluded from this report that there are many sources of the law like secondary and
primary. The Parliament has superior law making authority which enacts the statutory law while
judiciary brings common law. There are different business legislations which affects the
organizations as the working and functioning of enterprises are regulated by various laws such as
contract, company, employment law and many others. Further it is summarized that there are
many business organizations which are managed and funded as per their structure and includes
partnership, sole proprietorship, companies. There are many legal dispute resolutions apart from
litigation which bring fast disposal of matter in cost effective manner and includes arbitration,
conciliation, negotiation and mediation.

REFERENCES
Books and Journals
Addink, H., 2019. Good governance: Concept and context. Oxford University Press.
Anisina, K.T. and Pavlova, E.Y., 2021. Policy note: Transformation of the legal mechanism of
taxation under the influence of digitalization: Russian Case Study. Intertax. 49(5).
Bayefsky, A.F., 2017. The Principle of Equality Ornon-Discrimination in International Law (pp.
71-104). Routledge.
Leyland, P., 2021. The constitution of the United Kingdom: A contextual analysis. Bloomsbury
Publishing.
Powell, A., Stratton, G. and Cameron, R., 2018. Digital criminology: Crime and justice in digital
society. Routledge.
Richman, B.D., 2017. Stateless commerce. Harvard University Press.
Sihabudin, S., 2019. Legal Protection for Investee Company in Venture Capital Agreement in
Indonesia. Brawijaya Law Journal. 6(1). pp.94-103.
Smits, J.M. ed., 2017. Contract law: a comparative introduction. Edward Elgar Publishing.
Whiting, S.H., 2017. Authoritarian “rule of law” and regime legitimacy. Comparative Political
Studies. 50(14). pp.1907-1940.
Zharylkapova, G., and et. al., 2017. General legal characteristic and classification of crimes
committed in the sphere of small and medium business. J. Advanced Res. L. & Econ.. 8.
p.1657.